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Fixing 'Fiscal Cliff' Will Mean 'High, Higher' Taxes: Gross
CNBC ^ | 11/7/2012 | Jeff Cox

Posted on 11/08/2012 3:19:39 AM PST by gotribe

...Consequently, Gross said, higher dividend taxes would make those companies less attractive and thus take the stock market down 5 to 10 percent.

That's "the ultimate danger here for the stock market," he said. "Dividends are sheltered in 401(k)s, they're sheltered in pension funds. At the margins investors pay dividend tax rates. To the extent that you raise them from 15 to, say, 25 (percent), that implies in terms of equaling after tax rates another 5 to 10 percent down in terms of stock prices. We've been very spoiled for the last 10 years."

(Excerpt) Read more at cnbc.com ...


TOPICS: Business/Economy; Government; Politics/Elections
KEYWORDS: obamataxespoverty
1932 all over again, they never learn.
1 posted on 11/08/2012 3:19:53 AM PST by gotribe
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To: gotribe

What all this really is, the to-be-coming revelations about this calamity or that calamity, Benghazi et al, is the same thing as Obama getting up from the bed of his latest “one-night stand” and saying “By the way, you need to get yourself checked out - I gots the Herpes.”


2 posted on 11/08/2012 3:21:45 AM PST by Gaffer
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To: gotribe

...back when they started 401k’s I remember asking people, “think about it, the government and the banks getting together to do you a favor?”.....the the secondary question,
What’s the tax rate going to be when you need to be drawing on it?


3 posted on 11/08/2012 3:25:08 AM PST by Doogle ((USAF.68-73..8th TFW Ubon Thailand..never store a threat you should have eliminated))
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To: Doogle

...of course back then, would you have ever thought a big eared lying muslim Marxist would be leading the country?


4 posted on 11/08/2012 3:27:02 AM PST by Doogle ((USAF.68-73..8th TFW Ubon Thailand..never store a threat you should have eliminated))
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To: gotribe

Well if they don’t do anything before 31 December, we all will have higher taxes regardless. Those damn Democrats are seriously in charge right now. All Reid has to do is block whatever the House sends over until 31 December and we are all screwed. Ugh!!!!


5 posted on 11/08/2012 3:31:18 AM PST by napscoordinator (GOP Candidate 2020 - "Bloomberg 2020 - We vote for whatever crap the GOP puts in front of us.")
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To: gotribe
"1932 all over again, they never learn."

Maybe they do - equal distribution of the misery, vast increase in dependency, rising support for a government that feeds you, etc. Sounds like an Obama plan.

6 posted on 11/08/2012 3:36:56 AM PST by Truth29
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To: gotribe
I'm not so sure that I agree with Gross here. Higher dividend taxes may simply cause the stock market to revert back to its pre-2001 days when blue chip stocks that pay steady dividends lose their appeal in favor of growth stocks that pay no dividends but offer opportunities for capital appreciation.

In fact, I would even suggest that some economic growth in this country has been limited over the last 10 years simply because the tax code doesn't provide the same incentives like this that used to be in place.

These major corporations are not stupid. Change the tax code on them, and they'll simply change the way they do business to reflect the changes to their bottom line.

7 posted on 11/08/2012 3:44:36 AM PST by Alberta's Child ("If you touch my junk, I'm gonna have you arrested.")
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To: gotribe

Watch out my fellow Americans you are about to mugged to support fools who have not learned to so much as to cook a meal. Stay safe and be prepared. They will literally end in chaos when it all runs out.


8 posted on 11/08/2012 3:48:00 AM PST by formosa (consider me galt)
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To: Alberta's Child

In the long-run, I agree with you. Increase divvy taxes and they will stop pouring so much money into divvies and do more buybacks. In the end, they’ll privatize and pay the lower corporate taxes that are coming. Good for them.

However, over the next couple of months, I don’t intend to sit around and watch my retirement money get a 10% haircut.


9 posted on 11/08/2012 3:54:56 AM PST by gotribe (He's a mack-daddy http://www.youtube.com/watch?v=AV415yit7Zg)
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To: gotribe
If I were totally convinced that the stock market is going to get a "10% haircut," I'd sell all of my stock holdings in my 401(k) and sit on the cash until the market declines by 10%, then start buying back the exact same investment instruments afterward.

Personally, I think any anticipated "fiscal cliff" scenario is simply going to incentivize companies to pay a lot of dividends out of their cash holdings between now and the end of the year.

10 posted on 11/08/2012 4:04:17 AM PST by Alberta's Child ("If you touch my junk, I'm gonna have you arrested.")
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To: gotribe
I would also add that the U.S. is not going to get out of its fiscal mess unless future hikes are more regressive than the current tax environment. In other words, people who pay little or no taxes today are going to be expected to pay something in the future (hence the appeal of a VAT).

How ironic is it that the election of Barack Obama may very well drive the decline of the "47%" -- simply because a lot of those people are going to soon join their "53%" counterparts as taxpaying citizens.

11 posted on 11/08/2012 4:09:15 AM PST by Alberta's Child ("If you touch my junk, I'm gonna have you arrested.")
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To: napscoordinator
It is going to happen so get ready for it. We are ALL paying more... wait until the illegals and those that foul their own beds find out that their little paycheck just got smaller. Bring on the pain... the sooner the better... I am sorry for the Military but as for the pain... to cure cancer they almost kill you with chemicals and radiation... but they kill the cancer and you barely survive to recover... that is what is coming... ready yourselves accordingly. Me... I'm John Galt.

LLS

12 posted on 11/08/2012 4:20:08 AM PST by LibLieSlayer (OUR GOVERNMENT AND PRESS ARE NO LONGER TRUSTWORTHY OR DESERVING OF RESPECT!)
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To: Alberta's Child
Bret on fox last night was interviewing communist patty murray and she said that any tax deal would have to cover everyone... that all Americans will have to share in the tax burden... to be fair and to meet with marx’s approval... they must cover every working American. They are coming after everyone... wait until the obamaphone creatures find out that they owe obammy... or dey gets da slammy.

LLS

13 posted on 11/08/2012 4:25:45 AM PST by LibLieSlayer (OUR GOVERNMENT AND PRESS ARE NO LONGER TRUSTWORTHY OR DESERVING OF RESPECT!)
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To: napscoordinator

I am very seriously considering cashing in my 401K. Pay the high tax on early withdrawal, pay off all total debt and perhaps buy some silver or gamble it on commodities futures. Otherwise it will get raided to pay for Social Security, or taxed extremely high anyway.

And anything but to let these mooching bastards get it. At least I will have SOME benefit from it.

Too extreme?


14 posted on 11/08/2012 4:29:12 AM PST by Wildbill22
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Comment #15 Removed by Moderator

To: Alberta's Child
How ironic is it that the election of Barack Obama may very well drive the decline of the "47%" -- simply because a lot of those people are going to soon join their "53%" counterparts as taxpaying citizens.

Schadenfreude :-)

16 posted on 11/08/2012 4:42:53 AM PST by BlatherNaut
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To: gotribe

I don’t see where Boehner has anything to lose; he should play the game of chicken, get Fox and any other cameras which will cover him and start educating like Rush says our side needs to do:

* constitution
* what the fiscal cliff means
* taxes
* how each impacts YOU and the reality of not doing anything

Otherwise, he and congress WILL be blamed and yes, the country has proven they are stupid and gullible.


17 posted on 11/08/2012 4:45:39 AM PST by CincyRichieRich (Keep your head up and keep moving forward!)
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To: gotribe

Federal revenue never exceeds 20% of GDP.
Never.
We’re at 19%.
Raising taxes won’t work.


18 posted on 11/08/2012 4:52:55 AM PST by ctdonath2 ($1 meals: http://abuckaplate.blogspot.com)
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To: CincyRichieRich

Wait... is this JOHN Boehner you’re talking about?!?

*eyeroll*


19 posted on 11/08/2012 4:59:21 AM PST by EricT. (The GOP's sole purpose is to serve as an ineffective alternative to the Democrat Party.)
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To: Alberta's Child

There are longterm capital gains tax increases as well.


20 posted on 11/08/2012 5:13:40 AM PST by Chgogal (Obama helped murder US Navy SEALs.)
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To: CincyRichieRich

“I don’t see where Boehner has anything to lose; he should play the game of chicken. . . “

My prediction. Boehner compromises. Income tax rates for those at $250K and above will revert to the pre Bush tax cut rates or higher. The return to previous payroll tax rates will stand. Spending cuts will be reduced and pushed to future years. Extended unemployment benefits will be allowed to expire. All of the Obamacare tax increases will be preserved.

During early 2013 Obama and the Dems will propose numerous new spending bills and comprehensive immigration reform. The House will reject immigration reform as Obama expects. Obama will then use his pardon power to declare a general amnesty for illegals and dream up some executive authority to decree a fast track pathway for citizenship thereby guaranteeing millions of new Dem voters for the 2016 elections. He and the press will demagogue Republicans for not approving all of the job creating new social welfare spending he is creating. This will be used to deflect attention from the worsening unemployment rate which will of course be blamed on Congress not passing his spending plans. By mid to late 2013 the unemployment rate will be back over 10% and the Republicans will feel they have to compromise and provide new stimulus spending.

Meanwhile tax receipts will be dropping as the economy shrinks and fewer people are working or paying taxes. Obama will propose comprehensive tax reform taking millions off the tax rolls at the bottom end, reducing rates for the middle tier, raising rates again for the upper income groups, phasing out all deductions for the upper income group, and cutting 2% from the payroll tax. This fairness reform will include a small VAT of 1-2% plus a small tax on IRA’s, 401K’s and pension plans of the upper income group. He might even include a millionaire’s asset tax of 1-2% on financial assets owned over $1 million in the name of fairness. The United Nations financial transaction tax might also be buried in this bill. Finally, he might try to put some kind of carbon tax on utilities and refineries in this bill.

The fall will be all about Obama’s tax reform. It will be popular with the middle class and lower classes who will gain and not perceive the VAT to be significant and won’t perceive the asset tax as ultimately applying to them. Republicans will fight at first and face a media firestorm calling them the protectors of the rich. Eventually they will fold and the Democrats will have both a political victory and a stealth tax system in place (VAT, asset tax, IRA tax, financial transaction tax) they can increase every time they want additional revenue.

Based on the experience of the past 2 years, I have every reason to believe Boehner will compromise and Obama will end up with the winning hand. He is a deal maker, not a principled and courageous statesman.


21 posted on 11/08/2012 5:23:08 AM PST by Soul of the South
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To: ctdonath2

“Federal revenue never exceeds 20% of GDP.
Never.
We’re at 19%.
Raising taxes won’t work.”

Give that man a cigar. Everything else is moot.


22 posted on 11/08/2012 5:34:48 AM PST by headstamp 2 (What would Scooby do?)
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To: Wildbill22

Depends on whether you think your retirement withdrawals will be taxed at a higher rate than your income today. For most people the answer would be No.


23 posted on 11/08/2012 6:07:46 AM PST by gotribe (He's a mack-daddy http://www.youtube.com/watch?v=AV415yit7Zg)
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To: Chgogal

That increase would be relatively minor. Dividends would be taxed as ordinary income, while the top capital gains tax rate would rise from 15% to 20%. Interestingly enough, a large gap between income and capital gains tax rates would result in a climate that encouraged highly speculative investments that offered no income up front but some prospects for long-term growth. This was exactly the scenario that led to the dot-com boom of the late 1990s.


24 posted on 11/08/2012 4:51:19 PM PST by Alberta's Child ("If you touch my junk, I'm gonna have you arrested.")
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To: LibLieSlayer
My prediction is that the Democrats in the Senate and the Obama administration are going to come up with a plan that includes large tax increases on "the rich," and the GOP-led House might even get on board.

But after sifting through the details, we're going to find that it contains some hidden "land mines" that end up very costly for people who initially think they're getting away unscathed. One example of this will be the gradual elimination of the mortgage interest deduction. It won't be something that is clearly written into the tax code, but other changes will effectively eliminate it anyway. People who fall in the alternative minimum tax (AMT) bracket, for example, basically lose their mortgage interest deduction because their itemized deductions are all replaced with one large standard deduction (at which point it doesn't matter whether you pay mortgage interest, state and local taxes, etc.).

This is just one example of how the tax code will be used to "hide" tax hikes on people who are supposedly middle-class taxpayers. There will be plenty more.

25 posted on 11/08/2012 4:59:53 PM PST by Alberta's Child ("If you touch my junk, I'm gonna have you arrested.")
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To: Soul of the South

My prediction. Boehner compromises. Income tax rates for those at $250K and above will revert to the pre Bush tax cut rates or higher. The return to previous payroll tax rates will stand. Spending cuts will be reduced and pushed to future years. Extended unemployment benefits will be allowed to expire. All of the Obamacare tax increases will be preserved.

During early 2013 Obama and the Dems will propose numerous new spending bills and comprehensive immigration reform. The House will reject immigration reform as Obama expects. Obama will then use his pardon power to declare a general amnesty for illegals and dream up some executive authority to decree a fast track pathway for citizenship thereby guaranteeing millions of new Dem voters for the 2016 elections. He and the press will demagogue Republicans for not approving all of the job creating new social welfare spending he is creating. This will be used to deflect attention from the worsening unemployment rate which will of course be blamed on Congress not passing his spending plans. By mid to late 2013 the unemployment rate will be back over 10% and the Republicans will feel they have to compromise and provide new stimulus spending.

Meanwhile tax receipts will be dropping as the economy shrinks and fewer people are working or paying taxes. Obama will propose comprehensive tax reform taking millions off the tax rolls at the bottom end, reducing rates for the middle tier, raising rates again for the upper income groups, phasing out all deductions for the upper income group, and cutting 2% from the payroll tax. This fairness reform will include a small VAT of 1-2% plus a small tax on IRA’s, 401K’s and pension plans of the upper income group. He might even include a millionaire’s asset tax of 1-2% on financial assets owned over $1 million in the name of fairness. The United Nations financial transaction tax might also be buried in this bill. Finally, he might try to put some kind of carbon tax on utilities and refineries in this bill.

The fall will be all about Obama’s tax reform. It will be popular with the middle class and lower classes who will gain and not perceive the VAT to be significant and won’t perceive the asset tax as ultimately applying to them. Republicans will fight at first and face a media firestorm calling them the protectors of the rich. Eventually they will fold and the Democrats will have both a political victory and a stealth tax system in place (VAT, asset tax, IRA tax, financial transaction tax) they can increase every time they want additional revenue.

Based on the experience of the past 2 years, I have every reason to believe Boehner will compromise and Obama will end up with the winning hand. He is a deal maker, not a principled and courageous statesman.


I’m afraid I can’t make a logical, reasoned argument against what you are predicting. I hate it, though.


26 posted on 11/09/2012 5:09:14 AM PST by CincyRichieRich (Keep your head up and keep moving forward!)
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